Scott McNealy in a 2002 interview in Business Week when he was still CEO of Sun Microsystems:
“Two years ago we were selling at ten times revenues when we were at U$64.”
/ 1
“Two years ago we were selling at ten times revenues when we were at U$64.”
/ 1
At ten times revenues, to give you a ten-year payback, I have to pay you 100% of revenues for ten straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of good sold, which is very hard for a computer company. /2
That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. /3
And that assumes that, with zero R&D for the next ten years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at U$64? /4
Do you realize how ridiculous those basic assumptions are? You don’t need transparency. You don’t need footnotes. What were you thinking?” /end
*I lifted this passage from Sleep Zakaria letters
*I lifted this passage from Sleep Zakaria letters
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